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Donor Prospect Research: 4 Frequently Asked Questions

There are thousands of ways to fundraise for your nonprofit, from online campaigns to events and membership programs. But one of the most important forms of fundraising is seeking out major gifts.听

Whether your organization is new to the nonprofit scene or you鈥檝e been fundraising for decades, you know the importance of securing major gifts for your cause. These are the largest gifts your organization receives, and they empower you to truly move the needle on your mission.听

But before you can consistently secure major gifts for your nonprofit, you have to first identify the donors who are willing and able to give large gifts to your organization. This is done through .听听

Donor prospect research, also known as prospect research or prospecting, involves examining data about individuals outside of your current donor pool in order to learn more about their potential interest in your cause, their philanthropic history, and what they might be able to give. It鈥檚 a complex process that you need to get right if you want to build lasting relationships with major donors and secure impactful gifts for your cause.听

In this guide, we鈥檒l help you get started with prospecting (or help you brush up on the specifics!) by answering four frequently asked questions:

1. Why should my nonprofit conduct donor prospect research?听
2. What is the difference between prospect research and wealth screening?
3. How do organizations conduct prospect research?
4. How can I put my prospect research insights into action?听

Let鈥檚 dive in.听

1. Why should my nonprofit conduct donor prospect research?听

As mentioned above, donor prospect research enables you to identify viable major donor prospects for your nonprofit. Specific major gift amounts will depend on the size of your organization. For example, for one organization, $10,000 may be considered the minimum major gift amount. For another organization, the major gift threshold may start at $50,000.听

Although these specifics will be unique to your organization, the benefits of conducting prospect research in order to find major donors are quite universal. According to , these benefits include:听

• Securing a significant portion of your nonprofit鈥檚 overall revenue. Have you heard of the 80/20 rule? It states that 80 percent of your nonprofit鈥檚 revenue comes from just 20% of your donors. While all donors and donations are important for your nonprofit to progress, you should put special time and effort into identifying and building relationships with major donors for this reason.听
• Getting a strong start with large-scale projects like capital campaigns. Whether you鈥檙e looking to renovate your facility, build up an endowment, or purchase new equipment, a capital campaign is a huge endeavor that requires a foundation of major gifts to be successful. In fact, most of the time that goes into a capital campaign will involve soliciting major donations.听
• Enlisting your major donors as enthusiastic ambassadors for your organization. Major donors don鈥檛 just give large gifts鈥攖hey also have large hearts and care deeply about your cause. Because of this, they can play a large part in driving awareness for and involvement with your organization.听

Prospect research gives your nonprofit the information it needs to cultivate strong relationships with major donors, so it鈥檚 a process worth getting right regardless of your current relationship with major donor fundraising.

2. What is the difference between prospect research and wealth screening?听

As you learn more about prospect research, you鈥檒l likely see the term 鈥渨ealth screening鈥� (or just 鈥渟creening鈥�) pop up. However, wealth screening is just part of a comprehensive prospect research process. Let鈥檚 look at the process in a little more detail.听

Donor prospect research involves examining three different types of indicators or markers:听

• Propensity Indicators: Also known as habit indicators, propensity markers show that an individual has a habit of philanthropic giving. These indicators include:
  • Being on the donor list for other organizations听
  • Board service for other organizations听
  • Fundraising event attendance听
• Affinity Indicators: Also known as warmth indicators, affinity markers show that an individual may have a personal interest in supporting your specific mission because it resonates with them on a personal level. These indicators include:听
  • Political affiliations听
  • Past involvement and donation history with your organization or similar organizations听
  • Personal or professional connections with your current donors听
  • Personal alignment with your mission听
• Capacity Indicators: Capacity indicators, also known as wealth markers, show that an individual is in a financial position to give a large gift. These indicators include:听
  • Real estate ownership
  • Political giving history听
  • Stock holdings听
  • Business ownership or connections听

As you prospect, if you find individuals that exhibit all three types of indicators, you can be confident that you鈥檝e found a viable prospect to begin building a relationship with. Note that you won鈥檛 be conducting cold outreach鈥攜ou鈥檒l likely have some existing connection to the prospect, whether they鈥檝e given to your organization in the past or they鈥檙e friends with one of your board members who can make an introduction for you.听

Wealth screening involves examining capacity indicators alone. Typically, you鈥檒l use this process to screen individuals that are already in your donor pool. These individuals鈥� affinity and propensity can be inferred, but they may not have been invited yet to level up their giving.听听

3. How do organizations conduct prospect research?听

To find individual prospects with the right propensity, affinity, and capacity to power your mission, it’s important for your team to collect, organize, and analyze donor data. Fortunately, you can streamline the research process by leveraging key resources such as these:

• Your Nonprofit鈥檚 CRM: Use your to track giving histories, analyze engagement patterns, and identify existing supporters who are primed for deeper relationships.
• Online Search Resources: Publicly available web tools like search engines, online encyclopedias, digital web archives, and social media networks provide quick ways to verify a prospect’s background, professional achievements, and public presence.
• Prospect Generator Tools: Specialized prospect-screening engines use wealth indicators and philanthropic data to generate lists of potential major-donor prospects.
• Government Records: Public files, such as SEC investment reports and FEC political contribution data, offer objective insights into a prospect’s liquidity and wealth potential.
• Corporate Giving Databases: Comprehensive detail workplace giving programs, including matching gifts, volunteer grants, paid volunteer time off, payroll giving, corporate sponsorships, and in-kind donation opportunities. Knowing where your supporters work allows you to identify high-capacity prospects and accurately estimate their overall giving potential.
• Data Enrichment Services: Partner with an employer data enrichment service to automatically append employment details to existing supporter profiles. All you have to do is provide the information you do have for your supporters, and the data provider will handle filling in the rest!

As you gather information, be sure to build dedicated in your CRM. These profiles provide a clear roadmap for cultivating and stewarding relationships over time.

4. How can I put my prospect research insights into action?听

Once you鈥檝e conducted prospect research and found some individuals that you want to with, you鈥檝e only just started the process of major donor fundraising. Next comes the task of putting your prospect research insights into action.听

Here are a few ideas for doing so:听

• Ask for introductions. New prospects will likely be connected to someone who is already involved with your organization, whether they have a professional connection to a board member or their parent is a dedicated donor. Ask the person they鈥檙e connected with to make an introduction for you. This is a natural way to kickstart a conversation about your cause and also gives the prospect someone to talk to to learn more about your organization and what it is like to be a part of it.听
• Connect often. After your initial conversation, keep in touch with your prospect. Make sure to adhere to their communication preferences so that you know how they like to be contacted. For example, one donor may prefer an email or a conversation over coffee, while another may like receiving calls from your organization. As you continue to connect, get to know the prospect as a person and keep them updated on what your organization is doing.听听
• Invite involvement. Giving a gift isn鈥檛 the only way for your prospect to have meaningful experiences with your nonprofit. In fact, other forms of involvement will only help to deepen their connection to your cause. Reach out when an opportunity arises that you think they鈥檇 be interested in. For example, they might enjoy volunteering for your weekend river clean up one month, or they might be excited to attend your upcoming golf tournament.听

It will likely take a few weeks or months, but as you follow these steps, you鈥檒l find that your donor prospects get more and more invested in your nonprofit鈥檚 work and that they鈥檒l soon be receptive to a donation request. As you get to know them, make sure you鈥檙e preparing an initial ask that will be personally meaningful and will also help your nonprofit make progress with its mission.

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Major donor fundraising is made possible by thorough prospect research, but the process involves a lot of complexity. As you review these frequently asked questions, remember that a nonprofit consultant who is an expert in prospecting can be a great resource to turn to for more help.听

For a complete, in-depth guide on building a prospect research strategy, see .